The number of Alberta post-secondary students relying on provincial loans is ballooning

The number of Alberta post-secondary students relying on provincial loans is ballooning

The Alberta government has doubled the amount of money it allocates for student loans in the last five years as more students rely on borrowing to attend post-secondary programs.

New financial records show the government spent $279 million more than expected on student loans during the last two years to keep up with the demand. And Advanced Education Minister Rajan Sawhney says loans to private career colleges have surged.

The cost overruns should be a wake-up call to the government that post-secondary students are grappling with an affordability crisis, says Chris Beasley, chair of the Council of Alberta University Students (CAUS).

“Students have been telling this government that the need is there, that the need is prominent, and that we’re looking for more affordability measures,” he said in a Monday interview.

Man in suit sitting at table.
Chris Beasley, chair of the Council of Alberta University Students, says post-secondary students’ costs are becoming a crisis. (Submitted by Chris Beasley)

Between the 2018-19 school year and 2022-23, the number of students attending publicly funded Alberta post-secondary institutions climbed about two per cent, to 274,459 part- and full-time students, according to provincial data.

The Alberta Association of Career Colleges website says another 26,500 students were enrolled in the private institutions last year.

During that same five-year span, the number of students receiving a provincial student loan jumped 47 per cent to 124,482 students, according to numbers provided by the advanced education ministry.

New government spending estimates for the fiscal year finishing March 31, 2024, and requiring MLA approval, show the province needed an extra $201 million this year for student loans, and another $77.8 million to meet unexpected demand from students last year.

Provincial loans to students in 2023-24 now tally $1.26 billion. In 2018-19, that number was $638 million.

Advanced Education Minister Sawhney says her department is now investigating some “integrity issues” after seeing 52 per cent of the money loaned out this year going to students enrolled in private career colleges.

Sawhney said it was a “dramatic increase” from the previous year, when about a third of the loan money was going to students in private college programs.

“When you see an increase like that, you have to question it,” she told reporters at the legislature on Monday. “You have to ask why.”

Although the government has capped most tuition increases at two per cent per year, specialized programs can ask for exemptions, and international student tuition isn’t included in the cap.

Statistics Canada pegged the average post-secondary tuition in Alberta at $7,586 last year, which was higher than the national average and 33 per cent higher than four years earlier in the province.

Students using food banks, sleeping in cars: advocate

CAUS chair Beasley says students are getting financially crushed by the combination of rising tuition, rent hikes, ballooning utility costs and higher food prices.

“We’re seeing year-over-year increases across the board of food bank usage,” he said. “We’re seeing more students sleeping in cars, more students sleeping in unsafe living environments.”

The 2024 provincial budget proposes a slight decrease to needs-based grants, which students don’t have to pay back.

Even when students qualify for grants, they don’t cover all costs, Beasley said.

He said elimination of the Summer Temporary Employment Program (STEP), which helped local employers hire summer students, is making it more difficult for students to work good-paying seasonal jobs and save for the school year ahead.

Sawhney said the government has since replaced that program with a subsidized work-integrated learning program.

The increased student dependence on loans comes as the government tells post-secondary institutions they must rely less on the provincial government for funding.

The 2024 budget documents say post-secondary institutions received 47 per cent of their revenue from the province in 2022-23, and they want to reduce that to 42 per cent by 2026-27.

While the share of public funding droops, NDP advanced education critic Rhiannon Hoyle says institutions have to maintain the quality of their programs, or risk losing students to other provinces and countries.

It’s left students in untenable situations, choosing between buying food and buying textbooks, she said.

NDP Rhiannon Hoyle
NDP advanced education critic Rhiannon Hoyle says post-secondary students tell her they are struggling with the rising cost of living, tuition and textbooks. (Janet French/CBC)

“They’re really just cutting, they’re not helping students. They’re not helping our post-secondaries, and they’re not helping our economy through this,” Hoyle said.

Beasley said increased reliance on debt is a poor economic choice, because students will delay going into professional or graduate programs to work and earn money, which will delay them becoming higher-paid professionals who remit more income taxes. Grads saddled in debt also struggle to get loans to start a business, he said.

StatsCan data show that in 2020, 60 per cent of Alberta undergraduate students finished school with more than $25,000 debt and that the average new bachelor’s degree graduate owes $38,000 — both measures higher than national averages.

“Seeing those staggering debt loads, so many students simply choose not to enrol in university in the first place and to get an education that advances them toward their personal goals,” Beasley said.